Dhaka, Bangladesh (BBN)- Industrial credit disbursement has recovered in the third quarter of this fiscal year as it increased by more than eight per cent over the previous quarter, officials said on Sunday.
Industrial term loan disbursement rose to BDT 43.26 billion between January and March this year from BDT 39.89 billion in the previous quarter of fiscal 2008-09, according to the Bangladesh Bank (BB), the country’s central bank, statistics, released on Sunday.
Although the overall industrial credit still remained in the negative territory in the first nine months of the fiscal year, the latest quarterly data marked an upswing in investors’ sentiment, the BB officials said.
“Investment expectation has increased slightly after the new government took office in January this year. It helped restore confidence among the entrepreneurs despite the global meltdown,” a senior BB official told BBN in the capital, Dhaka, preferring anonymity.
“The entrepreneurs are thinking of expanding their productions. It indicates that things are improving,” Director General of the Bangladesh Institute of Development Studies (BIDS) Mustafa K Mujeri told BBN in Dhaka.
The general index of industrial production (medium and large scale manufacturing) stood higher at 410.92 during July-February, recording an increase of 8.39 percent over the same period of the previous fiscal.
Recovery of term loans, however, fell by over 15 percent during the third quarter due to the impact of the global meltdown, the central bank officials and private bankers said.
Mr. Mujeri, also former chief economist of the BB, said the fall was nothing to be worried about, as entrepreneurs were minimizing their risks and readjusting their productions in line with diminishing global demand.
“We expect that the recovery of term loans will improve in the near future as most businessmen have by now minimized their risk on investments,” he added.
“After the announcement of the budget for the 2009-2010 fiscal, we hope investments in a raft of projects will go up and recovery of the loans will rise markedly during the October-December this year,” Managing Director and Chief Executive Officer of the Agrani Bank Limited Syed Abu Naser Bukhtear Ahmed told BBN in Dhaka.
Overall investment trend, however, remains depressing as industrial credit disbursement slid by 9.60 per cent between July-March over the corresponding period of the previous fiscal.
The disbursement of industrial term loans stood at BDT 131.74 billion during the period, down from BDT 145.74 billion during the same period last fiscal, the BB’s data showed.
BBN/SS/SI/AD-08June09-2:12 am (BST)
